260 ADAM SMITH. 



explained. Some of the most important taxes are 

 very slightly touched upon, and the subject of an 

 income-tax is very imperfectly handled. The doctrine 

 of the Economists of a single tax, impot fonciere, being 

 substituted for all others, is rather indirectly treated 

 than fully and authoritatively exposed, while so great 

 an error claimed ample refutation ; and the manifest 

 fairness as well as advantage of so distributing taxes, 

 as to give every variety to them, and thus to make 

 their ultimate incidence as universal as possible, and 

 yet as far as possible proportionate to the means of 

 payment, is not at all dwelt upon, hardly touched. 



iii. In the early stages of society and of government, 

 the Sovereign always making provision for extraor- 

 dinary occurrences, used to amass out of his annual 

 income, either accruing from property or obtained by 

 taxes, savings which formed a treasure in course of 

 time. Even as far down as the early part of the 

 eighteenth century, the Prussian treasure enabled 

 Frederic II. to carry on successful wars almost as 

 much as the disciplined army, to which he succeeded 

 from his father. But in our times extraordinary emer- 

 gencies are met by borrowing ; and all Governments 

 are more or less in debt, many of them heavily in- 

 debted. It is much easier for the Government of a 

 commercial country to raise loans than for any other, 

 because capitalists are ever to be found able and 

 willing to advance money on the public security. For 

 the most part these loans have at first been personal, 

 that is, on the general credit of the Government; 

 afterwards when that was exhausted, the lenders re- 

 quired security, and branches of the public revenue 

 were mortgaged for repayment of the loans. The 

 unfunded debt of this country belongs to the former 

 class, the funded to the latter. The convenience of 

 raising supplies by loan is obvious ; but its mischievous 

 consequences are as manifest, and they very far coun- 

 terbalance its advantages. Were all supplies required 



